Verizon Voice Link Reversal was Less Political, More Pragmatic, Observers Say

"Many of our customers who now have Voice Link will keep the service even after the fiber network is deployed,” said a Verizon spokesman. “After the storm, from the very beginning, our goal was to offer a high quality and reliable voice service to our customers on Fire Island as quickly as possible.” Voice Link remains a good choice for many consumers, he said. The company decided to deploy fiber “after listening to our customers and gaining a better understanding of the wider range of services they had interest in,” he said.

Verizon will withdraw its Section 214 application, or amend it where appropriate, “after working through the details,” the spokesman said. Generally, no Communications Act Section 214 application is required if a company is going from one wireline technology to another, an FCC official said. Going from wireline to wireless is different, the official said. Verizon hasn’t said it would install fiber in the parts of New Jersey where its copper infrastructure was destroyed by Sandy.

The telco asked the New York Public Service Commission to suspend the PSC’s investigation of Voice Link on Fire Island because of a tariff amendment that the telco filed Tuesday (http://bit.ly/18Vejag). In addition to authorizing the use of voice as the company’s sole service in western Fire Island, the amendment would also eliminate language saying Voice Link would be “the sole Verizon service” where its facilities had been otherwise “substantially destroyed” by superstorm Sandy.

Verizon is targeting May 26 for the completion of its fiber-to-the-premises network construction and for general availability of all services, said its PSC filing. Verizon will offer a tariffed service over its fiber network and the Voice Link service for standalone phone service, said the company. The telco will offer one or more bundled FiOS service offerings including FiOS Digital Voice and broadband Internet access, said Verizon. Voice Link will continue to be offered on Fire Island as an optional service and it will continued to be operated by the terms of service previously approved by the PSC, said Verizon. The PSC will review Verizon’s filing, said a commission spokesman.

"Regardless of what it does for Fire Island specifically, it still needs to go through the 214(a) process for Mantoloking,” N.J., said Jodie Griffin, senior staff attorney at Public Knowledge. “Verizon’s decision to back down on Voice Link is to us a pretty clear implicit statement that they've realized Voice Link was just not ready for prime time,” she said. “As we saw in the hundreds of customer complaints that poured into the New York docket, this fixed wireless service was a serious step back compared to what residents had before Sandy in so many ways. Customers were outraged that they were being forced onto a service that had inferior voice quality, less certain reliability and no support for services like Internet access, alarm systems, and medical alerts, among others.”

"I don’t see this as a tacit admission by Verizon that wireless is not adequate to replace wireline, but just a practical determination of the best way to move forward in this area,” said Wiltshire Grannis telecom lawyer John Nakahata. “The FCC itself has been viewing wireless as an adequate technological substitute in areas where wireline deployment is too costly."

The Fire Island scenario is unique, said ex-FCC Commissioner Robert McDowell, a Hudson Institute visiting fellow. “It looks as though Verizon is bowing to customer demand rather than any kind of political pressure.” McDowell is optimistic on the potential of a fiber/LTE combination to serve the island during its peak summer usage period, he said. “In theory, migrating to a state-of-the-art infrastructure, which should offer a better customer experience, should also make it easier for regulators to allow a phase out of the old storm-damaged copper plant, not harder."

Offering the Verizon FiOS service was the right move for a service that has many issues, said state stakeholders. If the FCC made a ruling on Verizon’s Section 214 FCC application, it would set a precedent for other states, said Brad Ramsay, NARUC general counsel. “It was the right thing to do for any policymaker, but it also was the smart thing to do from their perspective because it avoids some potential case law at the FCC and state level that might hinder their other activities.” Verizon’s Voice Link service is “not ready for primetime,” and the telco will continue to work on it, said Sherry Lichtenberg, National Regulatory Research Institute principal. “The ability of public service commissions and the state agencies to do detailed fact finding is very important here, and the state should continue its investigation so they have a basis for information."

Areas of New Jersey are waiting to hear back from Verizon, which impacts the FCC’s decision, said Stefanie Brand, New Jersey Division of Rate Counsel director. “Unless they are going to provide FiOS to the towns impacted in New Jersey, there is no change and an important issue still needs to be decided.” The New Jersey Board of Public Utilities hasn’t started a proceeding for Verizon’s Voice Link service, but AARP asked the board to investigate the issue, said Brand. “Verizon’s Voice Link does not provide the same level of service that fiber or copper does, so it sounds like an acknowledgement of Verizon of the limitations to the Voice Link service” compared to a traditional phone service, she said.

Verizon decided to bring FiOS service to the most affluent area affected by Sandy, said Regina Costa, National Association of State Utility Consumer Advocates telecom committee chair. “There are other areas where Verizon has withdrawn copper service in other parts of New York like the Catskills and replacing it with Voice Link, so Verizon might use this as leverage to get all investigations to stop, but this should not apply to areas not covered by this,” said Costa. “They see a business opportunity in Fire Island, but it does not address the question of why they did not restore and repair their facilities in a timely manner.” Verizon should be required to refile its application with the FCC for Voice Link service under new circumstances, said Costa.

Verizon listened to the residents of Fire Island to provide FiOS service, said New York State Sen. Phil Boyle. The Republican attended the public hearing by the PSC Aug. 24 (CD Aug 27 p5). “Residents are pleased by Verizon’s decision,” said Boyle. “They recognize and appreciate that fiber is the way to go.” U.S. Sen. Charles Schumer, D-N.Y., applauded Verizon’s decision because it will help customers, he said in a written statement (http://1.usa.gov/1e3lMvf). “By installing fiber-optic cables on the island, Verizon will not only make the system as good as it was before, it will be making it better,” said Schumer. “Fire Island residents will now have greater access to high speed internet -- a necessity in the modern age -- and reliable voice service. Verizon deserves credit for listening to our concerns and changing course.”